GLOBAL INFORMATION SYSTEMS BUSINESS PLUG-IN B11 GLOBAL INFORMATION SYSTEMS

LEARNING OUTCOMES Explain the cultural, political, and geoeconomic challenges facing global businesses Describe the four global IT business drivers that should be included in all IT strategies

LEARNING OUTCOMES Describe governance and compliance and the associated frameworks an organization can implement Identify why an organization would need to understand global enterprise architectures when expanding operations abroad

LEARNING OUTCOMES Explain the many different global information issues an organization might encounter as it conducts business abroad Identify global system development issues organizations should understand before building a global system

GLOBALIZATION Traditional forms of business are simply not good enough in a global environment Many challenges that must be confronted to succeed in a global business environment including: Cultural Political Geoeconomic (geographic and economic)

GLOBALIZATION Industry Business Changes Due to Technology Travel Travel site Expedia.com is now the biggest leisure-travel agency, with higher profit margins than even American Express. Thirteen percent of traditional travel agencies closed in 2002 because of their inability to compete with online travel. Entertainment The music industry has kept Napster and others from operating, but $35 billion annual online downloads are wrecking the traditional music business. U.S. music unit sales are down 20 percent since 2000.The next big entertainment industry to feel the effects of ebusiness will be the $67 billion movie business. Electronics Using the Internet to link suppliers and customers, Dell dictates industry profits. Its operating margins rose from 7.3 percent in 2002 to 8 percent in 2003, even as it took prices to levels where rivals couldn’t make money. Financial services Nearly every public efinance company remaining makes money, with online mortgage service LendingTree growing 70 percent a year. Processing online mortgage applications is now 40 percent cheaper for customers. Retail Less than 5 percent of retail sales occur online, but eBay was on track in 2003 to become one of the nation’s top 15 retailers, and Amazon.com will join the top 40. Wal-Mart’s ebusiness strategy is forcing rivals to make heavy investments in technology. Automobiles The cost of producing vehicles is down because of SCM and web-based purchasing. Also, eBay has become the leading U.S. used-car dealer, and most major car sites are profitable. Education and training Cisco saved $133 million in 2002 by moving training sessions to the Internet and the University of Phoenix online college classes please investors.

CULTURAL BUSINESS CHALLENGES Cultural business challenges include differences in… Languages Cultural interests Religions Customs Social attitudes Political philosophies

CULTURAL BUSINESS CHALLENGES A company should ask a few key questions when creating a global website: Will the site require new navigational logic to accommodate cultural preferences? Will content be translated? If so, into how many languages? Will multilingual efforts be included in the main site or will it be a separate site - with a country-specific domain?

CULTURAL BUSINESS CHALLENGES A few key questions a company should ask when creating a global website (cont…): Which country will the server be located in to support local user needs? What legal ramifications might occur by having the website targeted at a particular country, such as laws on competitive behaviors, treatment of children, or privacy?

POLITICAL BUSINESS CHALLENGES Numerous rules and regulations surrounding data transfers across national boundaries (especially personal information) Tax implications Hardware and software importing and exporting Trade agreements

GLOBAL GEOECONOMIC BUSINESS CHALLENGES Geoeconcomic - refers to the effects of geography on the economic realities of international business activities Even with the Internet, telecommunications, and air travel the physical distances covering the globe make it difficult to operate multinational business

GLOBAL GEOECONOMIC BUSINESS CHALLENGES Understanding the cultural, political, and geoeconomic business challenges is a good start to understanding global business Business managers must understand four primary areas Global business strategies Global enterprise architectures Global information issues Global systems development

GLOBAL GEOECONOMIC BUSINESS CHALLENGES Four Global IT Business Management Areas

GLOBAL IT BUSINESS STRATEGIES Global IT business strategies must include detailed information on the application of information technology across the organization IT systems depend on global business drivers such as… The nature of the industry Competitive factors Environmental forces

GLOBAL IT BUSINESS STRATEGIES

GOVERNANCE AND COMPLIANCE One fast-growing key area for all global business strategies includes governance and compliance Governance - a method or system of government for management or control Compliance - the act of conforming, acquiescing, or yielding

GOVERNANCE AND COMPLIANCE IT Governance Institute Five focus areas Strategic alignment Risk management Performance measures Resource management Value delivery

GOVERNANCE AND COMPLIANCE IT governance frameworks: CoBIT: Information Systems Audit and Control Association (ISACA) ITIL: The Information Technology Infrastructure Library(ITIL) COSO: Committee of Sponsoring Organizations (COSO) CMMI: Capability Maturity Model Integration method (CMMI)

GLOBAL ENTERPRISE ARCHITECTURES Enterprise architecture - includes the plans for how an organization will build, deploy, use, and share its data, processes, and IT assets An organization must manage its global enterprise architecture to support its global business operations

GLOBAL ENTERPRISE ARCHITECTURES Top 10 telecommunication issues

GLOBAL INFORMATION ISSUES Businesses must have the appropriate levels of authentication, access control, and encryption in place, to ensure… That only authorized individuals can gain access to the network That they have access to only those applications for which they are entitled That information cannot be understood or altered while in transit

GLOBAL INFORMATION ISSUES Deperimeterization - occurs when an organization moves employees outside its firewall, a growing movement to change the way corporations address technology security Companies should focus on beefing up security in end-user devices and an organization's critical information assets

INFORMATION PRIVACY Transborder data flows (TDF) occur when business data flows across international boundaries over the telecommunications networks of global information systems Many countries view TDF as violating their national sovereignty

GLOBAL INFORMATION ISSUES US-EU Data Privacy Requirements

INFORMATION PRIVACY Information privacy - concerns the legal right or general expectation of individuals, groups, or institutions to determine for themselves, when, and to what extent, information about them is communicated to others Information privacy is about how personal information is collected and shared

EUROPE Any organization processing personal data of a person living in the EU must comply with key principles: Fairly and lawfully processed Processed for limited purposes Adequate, relevant, and not excessive Accurate Not kept longer than necessary Processed in accordance with the data subject’s rights Not transferred to countries without adequate protection

THE UNITED STATES Information privacy is not highly legislated nor regulated There is no all-encompassing law that regulates the use of personal data or information Access to public information is considered culturally acceptable, such as obtaining credit reports for employment or housing purposes

CANADA Canada’s privacy laws follow very closely to the European model Canada as a nation is quite concerned about protecting the personal information of its citizens Its primary privacy law is the Personal Information Protection and Electronic Document Act (PIPEDA)

GLOBAL SYSTEMS DEVELOPMENT Organizations can use several strategies to solve problems in global information systems development: Transform and customize an information system into a global application Set up a multinational development team Use centers of excellence Outsource the development work

INTEGRATING GLOBAL SYSTEMS The IT industry is one of the most dynamic in the global economy The integration of business and technology has allowed organizations to… Increase their share of the global economy Transform the way they conduct business Become more efficient and effective